These days, many Ontarians want to “put their money where their mouth is” and support businesses that not only provide the products and services they want, but also represent high environmental and social responsibility standards. As a result, many businesses who align with these values seek out B Corp certification. BCorp certification is a designation indicating that a business meets the highest standards of social and environmental performance, public transparency, and legal accountability. This certification helps businesses differentiate themselves from the competition and communicate their ethos to potential consumers.

As of 2023, there were 149 B Corps headquartered in Ontario, ranging from agricultural support to legal services. With environmental and social responsibility becoming an increasingly important topic, it is anticipated that more and more Ontario businesses will seek out B Corp certification to differentiate themselves from their competitors.

Below, we’ll explain what B Corp certification is, its benefits, and what the certification process entails.

What is B Corp Certification?

B Corp certification is a certification obtained by companies following a rigorous assessment of their social and environmental performance, transparency, and accountability. This designation communicates that the business meets high standards in these areas, and is awarded to qualifying businesses by B Lab, which is a global nonprofit organization.

What are the Benefits of B Corp Certification?

Depending on your business, services, and the types of clients you serve, obtaining B Corp certification can be a critical differentiator, allowing you to attract potential clients and develop trust with them from the outset.

Some of the benefits of obtaining B Corp certification include:

• Assessing your company’s performance: For many businesses, simply participating in the B Corp certification process can provide a current status assessment. It helps the company better understand where they are at in their performance, including how well the business is being run and what it could be doing better.
• Differentiating your services in a competitive market: Obtaining B Corp certification can provide your business with a competitive advantage in more crowded service markets where clients are looking for businesses that stand apart from the rest.
• Establishing credibility and trust with clients: B Corp certification provides clients with a neutral third-party validation of your commitment to social and environmental responsibility. In this sense, obtaining B Corp certification can help establish credibility and show that you truly “walk the walk” when it comes to your stated values.
• Shaping your business to align with your values: In the same way that B Corp certification can help you attract new clients, it can also help you attract the “right” clients, particularly if working with like-minded clients or consumers who support environmental and social initiatives and value transparency and accountability is important to you.
• Attracting and retaining talent: If you want to attract employees who live and breathe your company’s ethos, obtaining B Corp certification can be a great stepping stone to find your ideal talent. This certification demonstrates your company’s commitment to creating a positive impact, which can attract like-minded employees and foster a sense of ongoing pride and engagement among staff members.
• Obtaining investments and capital: Some B Corps find that it is easier to raise funds because of their certification, as it indicates to potential investors that the company is well-managed and adheres to high ethical standards (and thus, lower risk to invest in).

As the above list demonstrates, there are a variety of benefits to obtaining B Corp status, ranging from attracting clients to raising capital, that could potentially appeal to a wide variety of businesses.

How Does a Business Obtain (and Maintain) B Corp Certification?

According to BLab, a business seeking B Corp certification must establish that they:

• demonstrate high social and environmental performance;
• will make a legal commitment by changing their corporate governance structure to be accountable to all stakeholders (and not just shareholders) and achieve benefit corporation status if it is available in their jurisdiction; and
• exhibit transparency by allowing information about their performance to be publicly available on their B Corp profile.

Below is a high-level overview of the steps involved in obtaining B Corp certification, keeping in mind that the specific requirements can vary based on your business’s revenue and company size. For further information on the process, or to determine whether B Corp certification is right for you, be sure to speak with an experienced corporate lawyer for guidance.

Steps For Obtaining B Corp Certification

B Corp certification is not a certification that applies to everyone. Before starting your application, consider whether you are eligible for B Corp certification. If B Corp certification is right for you, you can begin the process by registering for the B Impact Assessment, which measures your business’s performance by reviewing your answers to a series of questions about your governance, worker, community, environment, and customer performance.

Following the B Impact Assessment, you will receive a score. Businesses seeking B Corp certification must obtain at least 80 points to continue on the certification path. Even if your business does not obtain 80 points, the B Impact Assessment can provide important guidance on improving your business’s environmental and social practices.

If you scored 80 points or above, you can then submit your results to B Lab for further consideration. Following B Lab’s review, and assuming no further information is required, you will be eligible for B Corp certification and your business will be registered in the B Corp Directory (along with your B Impact Assessment score and report).

Remember that B Corp certification is only the beginning. To maintain your certification, businesses must update their B Impact Assessment and verify their score every three years.

Final Thoughts on B Corp Certification

While B Corp certification is by no means a requirement, it can, in some cases, be a great differentiating factor for Ontario businesses. Obtaining B Corp certification demonstrates your business’s commitment to broad environmental and social goals, and even initiating the B Corp certification process can help provide great insights into your business’s performance through the B Impact Assessment.

Baker & Company’s Experienced Corporate Lawyers Provide Comprehensive Business Solutions

At Baker & Company, our trusted corporate lawyers provide personalized services for businesses of all sizes. Our business law team provides trusted legal advice and a full range of tailored business solutions to help clients build, structure, and manage their corporate affairs. From our office in Toronto’s financial district, our corporate law team provides clients with practical and proactive legal advice to mitigate risk and resolve issues before they escalate into larger disputes. To learn how we can help you with your business needs, contact us online or call us at 416-777-0100 to speak with a member of our team.

There are many moving parts to buying or selling a business. Some key considerations are whether to conduct an asset or share sale, which can direct the process and what kind of due diligence should be conducted. It is important to know the difference between each type before negotiations begin so that you can properly assess the next step in your purchase or sale.

There are advantages and disadvantages to an asset sale compared to a share sale of a business. This blog post will discuss the advantages and disadvantages of an asset or share sale from the perspectives of both the buyer and seller, which can assist in negotiations of buying or selling a business.

What is an Asset Sale or Purchase?

For an asset sale or purchase, the buyer and seller can choose which assets to transfer. Assets can include those that are tangible or intangible. For example, tangible assets can include real property, inventory, and equipment. Intangible assets can include trade names or other intellectual property, goodwill, contracts, permits, and leases.

Asset Sale: Benefits for the Buyer

An asset sale can benefit the buyer as the buyer does not need to assume all of the business’s liabilities as they would for a share sale. This is a primary draw for a buyer to consider an asset purchase over a share sale.

In an asset sale, the buyer is generally not required to keep all of the employees. However, a seller may require the buyer to retain the existing employees or sign new contracts with the employees to avoid liability arising from wrongful dismissal claims.

There are also some tax benefits to the buyer in an asset sale. The buyer is able to increase the tax cost of depreciable assets up to the current market value, which can reduce the buyer’s tax obligations in the future because they can obtain greater deductions in capital cost allowance.

Asset Sale: Disadvantages for the Buyer

Due to the increased taxes that a seller may have to pay in an asset sale, the purchase price may be raised as well.

Asset Sale: Benefits for the Seller

A seller may be able to increase the purchase price in an asset sale, as they may be more complex, or the seller may need to pay more taxes as a result. The seller would maintain some of the liabilities, which may be reflected as an increased purchase price.

Asset Sale: Disadvantages for the Seller

Generally, asset sales can be more complex than a share sale, as it involves transferring individual assets, which can involve a substantial amount of paperwork and documentation to ensure that they are transferred properly. In some cases, obtaining authorization from third parties may be necessary to transfer an asset, which can be costly and time-consuming.

Some of the liabilities would remain with the seller rather than being transferred fully to the buyer.

What is a Share Sale or Purchase?

A share sale involves selling the corporate shares of the business to the buyer. Unlike an asset sale, the assets remain within the company in a share sale.

Share Sale: Benefits for the Buyer

If the company being purchased has significant goodwill associated, it may be beneficial to a buyer to continue operating under the seller’s company name.

The price in a share sale may also be lower since the buyer assumes all of the liabilities.

The seller may need to provide warranties and indemnities to the buyer to cover some of the liabilities that the buyer would otherwise assume in a share sale.

Share Sale: Disadvantages for the Buyer

A key disadvantage for a buyer in a share sale is that they will obtain all of the liabilities associated with the company being purchased. As a result, it is important to ensure that due diligence is properly conducted in order to assess the risks and liabilities that a buyer is taking on. Depending on the liabilities, a buyer may seek to be indemnified by the seller or another party before finalizing the purchase.

In a share sale, the company’s employees generally remain as existing employees after the sale is complete. However, some of the existing employment contracts may allow some employees to exercise certain rights upon the new ownership. As a result, severance obligations may arise, and the buyer would be liable for satisfying these requirements.

Also, in a share sale, the buyer may have a less desirable tax outcome, as it may limit the depreciation that they can claim in the future.

Share Sale: Benefits for the Seller

A share sale may be a more straightforward process for the seller as it involves transferring the shares only. However, in some cases, it may be required to obtain third-party consent before transferring the shares, such as with leases or loan agreements. Depending on the contracts involved, it may also be a straightforward process if there are terms in the contracts to address any third-party consents that may be required.

The seller in a share sale may be able to reduce taxable capital gains and pay fewer taxes overall. The seller may also be able to reduce taxes involved in transferring specific assets, as in an asset sale.

Share Sale: Disadvantages for the Seller

As there are ways to reduce taxes upon a share sale, the buyer may negotiate to buy the company for a lower price.

A seller may have to reduce their price due to the buyer taking on more risk of liabilities upon a share purchase. Also, due to the possibility of significant liabilities that the buyer is taking on, the buyer may require the seller to provide comprehensive warranties and indemnities to cover some of that risk.

Key Takeaways

For an asset sale, the parties can choose which assets to transfer. Generally, a buyer will prefer an asset sale as they do not automatically assume all of the liabilities associated with the company being purchased. An asset sale is also more beneficial tax-wise for the buyer.

A seller may generally prefer a share sale as the liabilities would automatically transfer to the buyer. In a share sale, the seller would have more tax benefits as compared to an asset sale.

The purchase price may fluctuate to reflect each party’s advantages and disadvantages in a sale of a business.

Baker & Company Lawyers in Toronto Can Assist With Buying and Selling Businesses

Choosing how to buy or sell a business through an asset sale or share sale is a significant decision that involves many considerations. There are various advantages and disadvantages to how a business is sold, which depend on the specific circumstances involved. Our trusted corporate lawyers at Baker & Company are experienced with mergers and acquisitions and can assist you with the buying and selling of businesses. Our team is dedicated to providing quality service for all of your unique business needs.

To book a consultation, please contact us online or by phone at 416-777-0100.

COVID-19 introduced many new challenges for both individuals and businesses across the country. For many businesses, the need to close operations in accordance with pandemic restrictions came with many unknowns, many related to finances and the future of the business. For business owners who conducted operations out of a commercial rental property, it was unclear exactly what rights and obligations tenants and landlords had during such unprecedented times, and these issues continue to be disputed years later. 

In a recent decision from the Court of Appeal for Ontario, a commercial tenant argued that they should not be required to pay commercial rent during the period in which the pandemic restrictions prevented them from accessing the premises they were renting. 

Commercial tenant locked out of building during pandemic

In Niagara Falls Shopping Centre Inc. v. LAF Canada Company, the respondent landlord, owned a shopping centre outside of Toronto, Ontario. The appellant was a shopping centre tenant who operated fitness centres across Canada. The tenant entered into a commercial lease in April 2013 which stated that the tenant paid a monthly amount which combined rent and the tenant’s portion of operating expenses, which exceeded $101,000. 

The Ontario government declared a provincial state of emergency due to the COVID-19 pandemic on March 17, 2020. One week later, the government had mandated the closure of all non-essential workplaces, including gyms and fitness facilities. While the tenant’s business was eventually able to re-open, there were several months of operating interruptions due to surges in the pandemic. In most instances, when the tenant could re-open, it often had to limit and monitor its capacity limits. 

Parties enter into rent deferral agreement 

In May 2020, the tenant and landlord entered into a rent deferral agreement that provided limited rent relief from April to June 2020. This agreement provided that 50% of the base rent was forgiven and 25% was deferred. 

Once the agreement expired, the tenant subsequently paid rent until the end of 2020, despite being open with limited capacity. 

Tenant refuses to pay rent during lockdown

The Ontario government implemented another lockdown on December 26, 2020, at which point the tenant refused to continue to pay rent. The landlord responded to this by bringing an action against the tenant for unpaid rent and other charges. 

The appellant argued that it had no obligation to pay rent during government-mandated closures, relying on the doctrines of frustration and unjust enrichment, and pointing to the Force Majeure Clause (the “Clause”) in the lease. The tenant further counterclaimed for damages exceeding $618,824 and a declaration that:

1. it was relieved of its obligation to pay rent during periods of government-mandated losures; and
2. its obligation to pay rent would be reduced proportionately during periods of government-mandated capacity requirements.

Tenant is unsuccessful in defence of position

The landlord moved for a summary judgment, while the tenant did the same. By the time the matter was before the Court in November 2021, the tenant’s business had been closed for approximately nine months.

The motion judge rejected the tenant’s position and accepted the landlord’s argument that the government’s lockdowns constituted “restrictive laws” within the meaning of the Clause. This meant that the landlord was exempt from having to provide the tenant with the use of the rented premises. 

The motion judge also rejected the tenant’s position that the Clause required the lease to be extended for a period equal to the closures, calling the notion “commercially absurd.” Further, the motion judge found that the Clause did not relieve the tenant of its obligation to pay rent.

Tenant Appealed Motion Judge’s Findings

The tenant appealed the decision and asked the Court of Appeal to find that the motion judge erred in their interpretation of the Clause. 

The tenant sought a finding that either both parties should have been delayed from performing their obligations and, therefore, an extension to the lease should be granted. In the alternative, if the tenant was required to pay rent, they sought a lease extension equivalent to the months during which they paid rent for but could not access the premises. 

Court of Appeal Orders Lease Extension

The Court agreed with the tenant that the motion judge had made extricable errors. The Court found that the closure of the premises constituted a force majeure event, thus triggering the Clause. Furthermore, the Court agreed that the lockdown was a “restrictive law.” However, the Court found errors in the motion judge’s decisions following those points of agreement, particularly their comment that the tenant’s position was “commercially absurd.” 

The Court wrote that the motion judge made an error in interpreting the word “excuse” to me “exempted,” in reference to the finding that the respondent was not obligated to provide the appellant with access to the building. Instead, the Court of Appeal held that the obligation could be excused, but that the respondent then had an obligation to extend the rental period for a specific period of time after the lease expired. 

The Court allowed the appeal and declared that the landlord was excused from their performance under the lease to provide access to the premises during government-mandated closure periods. The Court also ordered that the lease was extended by the extension period, during which time the tenant is not required to pay rent. 

The Experienced Real Estate Lawyers at Baker & Company in Toronto Advise on Commercial Leasing Disputes

At Baker & Company, our experienced real estate lawyers work closely with each client to understand exactly what their needs are when dealing with commercial and residential real estate matters. We help clients manage a variety of real estate disputes and ensure that they receive comprehensive legal advice which will allow them to manage risk and make sound decisions throughout the dispute and resolution process. To arrange a consultation with a member of our real estate team, contact us online or call us at 416-777-0100.

When buying or selling an existing business, it is essential to ensure the potential buyer is aware of all information relevant to the sale. Sellers must also be mindful of additional requirements set out in industry-specific legislation.

This blog discusses a recent case where the seller of a franchise did not meet applicable disclosure requirements. This resulted in a hefty damages award after the buyer rescinded the agreement a year later.

Buyer wanted to acquire a news franchise

In 1901709 Ontario Inc. et al. v. Dakin News Systems Inc., two parties sought to strike a deal for one to acquire the franchise of another. The plaintiff, Mr. Tan, wanted to increase his income and found an opportunity in Mr. Ashtiani, who operated an International News franchise in Toronto and was looking to sell. The parties entered an Agreement of Purchase and Sale to transfer the franchise to Mr. Tan in trust (through his corporation, the other plaintiff, 1901709 Ontario Inc). 

The sale would go through on the condition that the franchisor approved and the landlord consented to the lease being reassigned. The franchisor and landlord, Dakin News, agreed to the sale and had Mr. Tan sign a franchise agreement and a sublease agreement. Mr. Tan provided Dakin News with several fees.

Buyer tried to pull out of purchase a year later

Mr. Tan, through 1901709 Ontario Inc., operated the store from March 2014 to April 2015. In April 2015, he sought to rescind the franchise agreement. Mr. Tan wanted to recoup his losses because, he alleged, Dakin News had not provided him with adequate disclosure as required by the Arthur Wishart Act (Franchise Disclosure). Section 5 of that Act reads as follows:

Franchisor’s obligation to disclose

5 (1) A franchisor shall provide a prospective franchisee with a disclosure document and the prospective franchisee shall receive the disclosure document not less than 14 days before the earlier of,

(a) the signing by the prospective franchisee of the franchise agreement or any other agreement relating to the franchise, other than an agreement described in subsection (1.1); and

(b) the payment of any consideration by or on behalf of the prospective franchisee to the franchisor or franchisor’s associate relating to the franchise, excluding the payment of a deposit if it,

(i) does not exceed the prescribed amount,

(ii) is refundable without any deductions, and

(iii) is given under an agreement that in no way binds the prospective franchisee to enter into a franchise agreement.

Dakin News responded that it did not believe any disclosure was required. Subsection 5(7) of the Arthur Wishart Act waives the disclosure requirement if a third party purchases the franchise from an existing franchisee. As a result, the central issue was whether Dakin News was required to provide disclosure to Mr. Tan and his trust company, 1901709 Ontario Inc.

Was the six-step approval process enough to fulfill disclosure?

In addition to the required approval by Dakin News of the sale of the franchise and assignment of the lease, Dakin News imposed a six-step procedure upon Mr. Tan’s company. The steps were as follows:

1. “Email us the lawyers’ (the buyers’ and the seller’s) contact information which includes the name, address, telephone number, fax number and email address.
2. Fax or email us a copy of the Purchase and Sale Agreement
3. BUYER to provide the following information through the SELLER or its Solicitor:

1. The last mortgage statement showing principle [sic], interest amounts and current balance outstanding
2. Letter from financial institution confirming cash on hand, stocks, bonds, other investments, debts and loans
3. Current credit card balances
4. Articles of Incorporation listing of all shareholders and directors
5. Completed Franchise application

4. SELLER to provide a certified document (from your accountant) showing the total gross sales (which includes HST) for the last 12 months immediately preceding the transfer.
5. BUYER to obtain a Bulk Sales Act from the SELLER through your lawyer to make sure all debts (the seller’s) have been settled before the transfer. This document does not have to be handed over to us. BUYER to have their lawyer do a “holdback” on the funds you are going to release to the SELLER to cover any rental adjustments that are still to come. The Landlord does not have the reconciled numbers until at least 3 to 9 months (in the majority of the cases) after the end of the current year.

When we receive all of the above to our satisfaction, the BUYER AND SELLER shall be contacted AND THE BUYER will be asked to come in for an interview.

6. A transfer date will then be determined by Operations Department provided there are no more outstanding issues and all funds are in from both parties and the new Franchise and Sublease Agreements are signed.”

Rescission fee demanded from buyer after approval process completed

The plaintiffs completed all the steps on January 27, 2014. In July 2014, Mr. Tan received a letter from Dakin News advising of plans to rebrand the International News franchise. This would require payment of $75,000 in three installments for the refurbishment. Since the franchise agreement and sublease were set to expire in May 2015, Mr. Tan was obligated to accept this, even though 1901709 Ontario Inc. had already paid a renewal fee.

For this reason, the company issued its Notice of Recission in May 2015 under section 5 of the Arthur Wishart Act. Mr. Tan sought refunds of the purchase price, inventory and supply costs, losses incurred from the franchise’s acquisition, and damages under the Arthur Wishart Act. 

Dealings between franchisor and new franchisees require disclosure

Under section 6(2) of the Arthur Wishart Act, a franchisee can rescind the franchise agreement without penalty if disclosure requirements are not met. The time limitation to do this is within two years of signing the franchise agreement. If Dakin News believed it to be exempt from disclosure requirements, it would have to prove this fact under section 12 of the Act.

While Mr. Tan’s initial contact with the franchise was through an existing franchisee, Mr. Ashtiani, the Ontario Superior Court found that the deal ultimately struck was with the franchisor, Dakin News. Dakin News required Mr. Tan to enter an entirely new agreement and sublease. It also demanded Mr. Tan pay an inventory fee of $20,000, even though Mr. Tan had purchased Mr. Ashtiani’s existing inventory. The Court found that the exemption set out in section 5(7) of the Arthur Wishart Act as Dakin News was the party that had effected the grant of the franchise.  As a result, Dakin News could not use its existing franchisee to shield it from its statutory disclosure obligations.

The franchisor was obligated to pay the franchisee who rescinded the agreement

As a result of the above analysis, the Court concluded that Mr. Tan and 1901709 Ontario Inc. were entitled to rescind the franchise agreement under section 6(2) of the Arthur Wishart Act. The Court ordered that Dakin News and its associates were liable to pay 1901709 Ontario Inc. a sum of $32,048. This sum was to reimburse Mr. Tan and 1901709 Ontario Inc. for training, the security deposit, and royalties. The Court added $1,123 in damages for inventory costs. Finally, Mr. Tan and 1901709 Ontario Inc. were to be reimbursed $51,274 for the operating losses incurred.

Baker & Company Provides Trusted Advice on Mergers, Acquisitions, and Franchise Agreements in Toronto

The knowledgeable corporate and commercial lawyers at Baker & Company provide reliable advice and innovative legal solutions to entrepreneurs looking to start or grow a business. Whether you are a new or seasoned business owner, we help navigate the business law landscape and ensure your company is structured to maximize profitability and avoid risk. Our team advises on all aspects of mergers and acquisitions, as well as franchise agreements (especially pertaining to hotel law). To speak with a member of our business law team, please call 416-777-0100 or contact us online.

Ontario’s Ministry of Economic Development, Job Creation and Trade recently announced the introduction of a new Business, Workplace, and Economy website to help entrepreneurs start new businesses in the province. The site provides access to information and services to support business growth and job creation.

Entrepreneur Website Part of Fewer Fees, Better Services Act

The Business, Workplace, and Economy website connects entrepreneurs to resources and free personalized help in applying for funding, tax credits, and registering their business. The website was created under the initiatives developed by the Fewer Fees, Better Services Act, which received royal assent on March 3, 2022. The preamble of the Fewer Fees, Better Services Act states:

“Ontario is committed to reducing administrative burdens for those seeking permits, licences, information or any other type of government approval and improving the overall experience for the user by making it easier to access required information and services.

Ontario is dedicated to increasing predictability and keeping government accountable.”

The website is part of the provincial government’s efforts to cut red tape and reduce burdensome administrative and regulatory requirements. Minister of Economic Development, Job Creation and Trade Vic Fedeli stated that the site demonstrates that the province has “listened to business owners” and will raise the bar for customer service.

As per Associate Minister of Small Business and Red Tape Reduction Nina Tangri:

“With the launch of the new website, we’re taking the first step toward a holistic, start-to-finish approach to allow entrepreneurs to more effectively interact with government in meeting the requirements to get their business up and running.”

Helping Entrepreneurs Start a Business 

The Business, Workplace, and Economy website connects entrepreneurs to information and guides about:

• Choosing a business structure
• Registering a business name in Ontario
• HST number registration, including rebates
• Obtaining a business number for business tax purposes
• Setting up payroll and benefits
• Permits, licensing, and insurance
• Employer Health Tax
• Provincial tax credits

Business Closures

In addition to helping Ontario business owners start an enterprise, the website also provides information about issues relating to closing a business, including succession planning, selling a business, account closures, and bankruptcy.

Small Business Enterprise Centres

Small Business Enterprise Centres are located throughout Ontario and offer advisory services and workshops on foundational entrepreneurial skills. These centres provide support, mentorship, training, and grant opportunities to new business owners. Entrepreneurs can search by postal code to determine the location of the nearest Small Business Enterprise Centre.

Information About Funding Opportunities 

Depending on the type of business and services offered, Ontario business owners may be eligible for various programs, grant opportunities, and funding relating to:

• Indigenous economic development
• Student summer businesses
• Tech start-ups created by students and recent graduates
• Employee training
• Digital Main Street assistance for brick-and-mortar businesses seeking to go digital
• Racialized and Indigenous Supports for Entrepreneurs (R.A.I.S.E)

The website also offers financing advice, mentoring, and support for aspiring business owners between the ages of 18 and 39.

Funding for businesses looking to expand or bring business to their community is, in some cases, specific to the region in which the company seeks to operate: Eastern Ontario, Northern Ontario, Southwestern Ontario, or Rural Ontario.

Employment Laws & Workplace Insurance

Ontario entrepreneurs can use the new website to access information about their rights and obligations as an employer under the Employment Standards Act and the Occupational Health and Safety Act.

To ensure compliance with accessibility laws, the site provides free training about employee accessibility requirements and standards, including mandatory accessibility reporting for businesses or non-profit organizations with 20 or more employees.

Businesses can also determine whether they need workplace insurance for wage-loss benefits, medical coverage, and support for employees suffering work-related injuries or illnesses. Additionally, entrepreneurs can research business insurance to protect against loss or damage to physical property or the loss of operation and income.

Indigenous Business Development Toolkit

The Indigenous Business Development Toolkit aims to provide support and resources to Indigenous persons in Ontario looking to start or expand a business. The toolkit includes a list of Indigenous financial institutions that can assist with business planning and instructions for bidding on government contracts that benefit Indigenous people and communities.

In addition to the toolkit, Indigenous entrepreneurs are encouraged to read the First Nations Community Economic Development Guide for practical advice, case studies, and economic development resources for boosting their community’s local economy.

Export and Trade 

In addition to provincially-focused business matters, the Business, Workplace, and Economy website provides information on growing a business nationally and internationally. It offers information about international trade programs and events, including exhibitions, seminars, and workshops, across multiple sectors and market regions. 

Ontario-based businesses can use the site to find trade missions, market research, trade insurance options, and funding opportunities.

Contact Baker & Company in Toronto for Trusted Business Law Advice

The knowledgeable corporate and commercial lawyers at Baker & Company provide reliable advice and innovative legal solutions to entrepreneurs looking to start or grow a business. Whether you are a new or seasoned business owner, we help navigate the business law landscape and ensure your company is structured to maximize profitability and avoid risk. To speak with a member of our business law team, please call 416-777-0100 or contact us online. 

As we discussed in a previous blog, in August of this year, the Ontario government introduced two significant changes to the province’s business laws. It announced the coming into force of the Not-for-Profit Corporations Act, 2010, with substantial effects on the not-for-profit sector. These changes also heralded the creation of the online Ontario Business Registry (“OBR”), which aims to modernize the business filing system in Ontario by moving several essential corporate services online.

It has been a month since the Ontario Ministry of Government and Consumer Services opened the OBR. The government has reported that in the first 30 days, 120,000 transactions were processed using the new online system. This blog reviews the features of the new OBR, as well as reports of delays and costs caused by glitches in the new process.

Features of the Ontario Business Registry

Online Filing System

The Ontario Business Registry streamlines access for all organizations that are registered, incorporated, or licenced to carry on business in Ontario. Unlike the previous paper system, the OBR is accessible 24 hours a day, 365 days and facilitates more than 90 types of transactions, including the incorporation, amalgamation, and dissolution of existing businesses. Business registrations or filings that were previously submitted by mail or fax and took four to six weeks to process can now be completed online.

All corporations filing under the Business Corporations Act, the Business Names Act, the Corporations Act, the Not-For-Profit Corporations Act, the Corporations Information Act, the Extra-Provincial Corporations Act, the Partnerships Act, and the Limited Partnerships Act will be able to file under the OBR. Corporations already registered or incorporated in Ontario were automatically given a profile on the OBR when it launched.

As part of the new Ontario Business Registry system, the Ontario Corporations Information Act has been amended: annual return forms are no longer available for download from the Canada Revenue Agency (the “CRA”) website and, as of May 15, 2021, annual returns can also no longer be filed with the CRA. Corporations must now file their annual returns electronically using the OBR. A corporation that wants to file its annual return directly must register with the OBR by providing an official email address and receive a corporate access key. A registered intermediary, such as a law firm, can complete these and other required corporate findings on behalf of a corporation. By filing annual returns online, corporations can now keep all their filings in one place.

Company Keys and Business Numbers

Individuals who incorporate or register a new business directly with the Ontario Business Registry will be assigned a “company key.” The company key is a confidential passcode that may be shared with authorized representatives, such as legal counsel, to allow them to make profile changes and complete filings. Existing corporations can request a company key using the Request Form.

A company key is not be required if a corporation completes filings through a registered service provider since the registered service provider will have the authority to complete filings for the corporation.

In addition to the company key, a corporation may also be issued an Ontario Business Identification Number (“BIN”), a 9-digit number assigned by the Central Production and Verification Services Branch, Ontario Business Information System. The Ontario BIN is different from the federal business number issued by Canada Revenue Agency and can be found on a corporation’s Master Business License.

Integrating the OBR with the CRA is meant to enable the identification of a business or not-for-profit corporation by a single business number, allowing for a streamlined administrative process.

Law Firms Report “Significant Disruption,” “Significant Costs” Caused by Ontario Business Registry Glitches

While the Ontario Business Registry is just over a month old, users are already reporting problems using the system. The CBC and Toronto Star recently reported that users have said the OBR is negatively affecting business and is “having a chilling effect on doing business in Ontario in general.” In a letter to the Minister signed by sixteen law firms who represent hundreds of thousands of entities trying to carry on business in Ontario, the lawyers stated:

“The system shutdowns, technical glitches and substantive problems associated with the new [OBR] are causing significant disruption, delaying transactions and adding significant costs for businesses.

Given our collective OBR experiences to date, we have no confidence or assurances that year-end filings — the busiest time of the year for our law firms — can be completed without putting entire transactions at risk.”

The 16 law firms who signed the letter have said that they “are now recommending to their lawyers and clients that the creation or use of Ontario entities in corporate transactions be avoided if possible.” They said they were recommending registration with “federal entities or other provincial jurisdictions … in order to not jeopardize the successful completion of many year-end transactions.”

Contact Baker & Company in Toronto for Advice in Business Law Matters

At Baker & Company, we are passionate about business. Our corporate and commercial lawyers are here to assist with a wide range of corporate issues and provide tailored consultancy services to meet the unique needs of your business. Our skilled team of corporate lawyers is here to help your organization navigate the Ontario Business Registry and ensure your filings, including annual returns, are handled efficiently and effectively. To speak with a lawyer, contact us online or by phone at 416-777-0100.